Tax hikes threaten to cripple restaurant operators

Leicester Square

A leading hospitality body is calling on Chancellor George Osbourne to be more radical in his reform of business rates to lessen the impact of tax rises on UK restaurant operators.

The Association of Licensed Multiple Retailers (ALMR) said urgent action is needed after figures released in the wake of last week’s Budget show the scale of tax increases expected to hit pubs and restaurants over the next two years.

HM Treasury’s ‘red book’ outlining the Government’s Summer Budget details a forecasted increase in business rates from £27.3 billion in 2014-15 to £32.9 billion in 2020-21 and the publication of responses to an initial review of business rates administration shows strong opposition from local authorities to any changes being made to the current regime.

ALMR chief executive, Kate Nicholls, said: “Before the Election, the Chancellor promised ‘once in a generation’ reform of business rates and these figures published today show why that is so vital.

“The Budget Statement forecasts a steady increase in business rates receipts over the next six years, despite repeated warnings that this is crippling the UK’s high streets. Increasing bills by a fifth at a time when businesses will be prioritising investment in wages is frankly unsustainable and it is high street businesses like pubs, bars and restaurants which will bear the brunt of it.”

Nicholls added that business rates were the single biggest barrier to increasing competitiveness and productivity in the hospitality sector.

The Government also published the responses to recent consultations on business rate appeals and administrative reform.

Nicholls said: “The initial responses to the Government’s call for reform from other stakeholders do not make for particularly inspiring reading either. We are particularly concerned about a lack of appetite from local authorities for even minor changes such as more frequent valuations, streamlined forms and data collection that have met with some resistance and there is always a worry that any changes that may be brought in will not cut to the heart of the problem.

“We will await the government’s response and welcome continued dialogue; but there needs to be a renewed focus from the government and a clear plan of action to address this ongoing and substantial problem.”

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